Interest, Scatter Plots and MAD Review

Front

What is simple interest?

Back

Simple interest is calculated using the formula: I = PRT, where I is the interest, P is the principal amount, R is the rate of interest per year, and T is the time in years.

Front

What is compound interest?

Back

Compound interest is calculated on the initial principal and also on the accumulated interest from previous periods. The formula is A = P(1 + r/n)^(nt), where A is the amount of money accumulated after n years, including interest, P is the principal amount, r is the annual interest rate, n is the number of times that interest is compounded per year, and t is the number of years.

Front

What does it mean for a scatter plot to have a strong association?

Back

A scatter plot has a strong association when the points are closely clustered together, indicating a strong correlation between the two variables.

Front

How do you calculate the total amount paid on a loan with compound interest?

Back

To calculate the total amount paid on a loan with compound interest, use the formula A = P(1 + r/n)^(nt), where A is the total amount, P is the principal, r is the interest rate, n is the number of times interest is compounded per year, and t is the number of years.

Front

What is the formula for calculating the Mean Absolute Deviation (MAD)?

Back

The Mean Absolute Deviation (MAD) is calculated by taking the average of the absolute differences between each data point and the mean of the data set.

Front

What is the principal in a loan?

Back

The principal is the original sum of money borrowed in a loan or invested, excluding any interest or dividends.

Front

What is the difference between a positive and negative correlation in scatter plots?

Back

A positive correlation means that as one variable increases, the other variable also increases. A negative correlation means that as one variable increases, the other variable decreases.

Front

How does compounding frequency affect the total amount of interest earned?

Back

The more frequently interest is compounded, the more interest will be earned on the initial principal and accumulated interest, leading to a higher total amount.

Front

What is the significance of the interest rate in loans and investments?

Back

The interest rate determines how much extra money will be paid on a loan or earned on an investment over time.

Front

What is a scatter plot?

Back

A scatter plot is a graph that shows the relationship between two quantitative variables, with points representing the values of each variable.